Tuesday, July 22, 2008

SAP puts TomorrowNow out of its misery

It's not been a good month for SAP. Last week, it came under fire for botching up transition of support for its Business Objects customers. Now, SAP is announcing that it is killing off its TomorrowNow subsidiary, which provides third-party support for several Oracle products, such as J.D. Edwards, PeopleSoft, and Siebel.

TomorrowNow and SAP are the target of a lawsuit by Oracle alleging theft of Oracle's intellectual property. SAP has been trying to sell TomorrowNow since last year, but to no avail.

In its press release, SAP said that it is "working directly with TomorrowNow’s more than 225 current customers to help them return to support from Oracle...or to smoothly transition to new support options."

On the surface, SAP's troubles with TomorrowNow might seem to tarnish the image of third-party support, but I don't think so. SAP was asking for trouble by offering support for a competitor's products, especially those of a competitor as aggressive as Oracle. But, in my opinion, as long as vendors--such as SAP and Oracle--continue to charge 22% of the net license fee for ongoing support, the financial benefits of third-party support are simply too attractive for some customers to ignore. This is especially true for customers that have highly modified their vendor's systems, have no intention of upgrading, or are planning a migration to a different system at some point in the future.

Where will TomorrowNow customer's go? Some will return to the Oracle fold. But some will likely go to another third-party support provider, such as Rimini Street or netCustomer.

A quick email reply from David Rowe at Rimini Street this morning indicates that "the phone is ringing off the hook"--not only because of TomorrowNow's shutdown, but also because of SAP's recent announcement of support fee increases. (An equal opportunity provider, Rimini Street offers third party support to both Oracle and SAP customers).

Related posts
SAP botching up support transition for Business Objects
SAP lists TomorrowNow as a discontinued operation
SAP considering sale of TomorrowNow
Oracle sues SAP and its TomorrowNow unit

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